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Democrats seek financial rescue of minority-owned broadcasters

Discussion in 'Political Zone' started by trickblue, May 20, 2009.

  1. trickblue

    trickblue Old Testament...

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    Democrats seek financial rescue of minority-owned broadcasters
    By Silla Brush

    High-ranking House Democrats are urging the Treasury Department to prop up minority-owned broadcasters suffering from a lack of capital and lost advertising revenue amid the economic slump.

    House Majority Whip James Clyburn (D-S.C.) is leading an effort to convince Treasury Secretary Timothy Geithner to take “decisive action” by extending credit to this sector of the broadcasting industry.

    Clyburn and other senior members, including House Financial Services Committee Chairman Barney Frank (D-Mass.) and Ways and Means Committee Chairman Charles Rangel (D-N.Y.), argue that minority-owned broadcasters are sound businesses, but that the recession could undermine the government’s efforts to diversify the airwaves.

    A number of members from the Congressional Black Caucus signed the letter, too.

    “While many jobs are at stake, a more important principle — the government’s fundamental interest in promoting a diversity of voices, including service to underserved communities — is severely threatened,” the members write in a draft of a letter that was scheduled to be sent Tuesday.

    The letter comes as some of the biggest recipients of government bailout money, including JPMorgan Chase & Co., Goldman Sachs and Morgan Stanley, jockey to repay government bailout money. As banks seek a way out from the government’s restrictions, other industries struggle and seek government support. Some firms seeking to repay the government argue that the government’s restrictions have burdened their businesses.

    The congressmen suggest the Treasury Department could provide access to capital to minority-owned broadcasters, which they say represent less than 7 percent of full-power radio stations and a “negligible” ownership of television stations.

    “They are looking for continued access to capital to continue their otherwise fundamentally sound operations,” the members write.

    The letter suggests Treasury could set up a credit facility specific to the industry, similar to the government’s efforts to support auto suppliers, or possibly set up a program for bridge financing and government-backed loans until the economy improves.

    “In addition to the credit crisis, also weighing heavily on minority broadcasters is a significant decline in advertising revenues, particularly the loss of automobile advertising,” the congressmen write.

    The members are asking for a meeting with the Treasury Department and minority-owned broadcast entities and representatives from the National Association of Black Owned Broadcasters.

    Other members signing the letter are Democratic Reps. Bobby Rush (Ill.), Edolphus Towns (N.Y.), Maurice Hinchey (N.Y.), Carolyn Maloney (N.Y.), Maxine Waters (Calif.), Gregory Meeks (N.Y.), G.K. Butterfield (N.C.), Barbara Lee (Calif.), Lynn Woolsey (Calif.) and Bennie Thompson (Miss.)
  2. Temo

    Temo Well-Known Member

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    Yea, I don't see that happening.
  3. trickblue

    trickblue Old Testament...

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    The thing that gets me is the possible introduction of blatantly racial legislation...
  4. WoodysGirl

    WoodysGirl Everything is everything... Staff Member

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    Based on what I've been hearing on the local hip hop station, this is probably in response to a separate piece of legislation that is going to tax radio stations for the music they play.

    The way it's being spun is that this tax is going to put low revenue dials out of business.

    I'll look up the bill number now.
  5. WoodysGirl

    WoodysGirl Everything is everything... Staff Member

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    Hearing Held On Performance Rights Act

    WASHINGTON -- March 10, 2009: House Judiciary Committee Chairman John Conyers (D-MI) opened this morning's hearing on the Performance Rights Act, which would impose performance royalties on broadcast radio, by saying, "The current situation involving recording artists, musicians, is not one that we can be very proud of. We hear a song on the radio, someone singing or playing the melodies, who receives absolutely no compensation."
    Conyers, a supporter of the performance right, continued, "Some would have us believe the artists are being done a great favor by being played at all." He pointed to other audio platforms that do pay a performance royalty and said radio's exemption "doesn't make much sense."

    Rep. Lamar Smith (R-TX) said in his opening remarks that the economic downturn, with ad sales off and the difficulty of raising capital, has been a "double hit for radio stations." Smith was the first of several lawmakers today to express support for the idea of a third-party study to help formulate royalties legislation.

    Performance royalties were a pet project of former Judiciary Committee Chair Howard Berman (D-CA), now heading up the Foreign Affairs Committee, and at the hearing he read from Commonwealth Broadcasting President/CEO and NAB Radio Board Chair Steve Newberry's testimony on radio's promotional value -- before Newberry had delivered that testimony -- and said, "Specifically built into this bill is a way to take into account the value of promotions." And with regard to the NAB's approach, Berman said, "Continually saying no is not a productive way to accommodate real issues."

    After more opening statements, including Rep. Maxine Waters (D-CA), who said any bill must not "diminish the voice of minority broadcasters," Smashing Pumpkins frontman Billy Corgan was the first witness, speaking on behalf of the MusicFIRST Coalition, a lobbying group formed to push for performance royalties.

    'Fundamental Fairness'

    Corgan began, "Because of my experience in the music business for over 20 years, I have a particular sensitivity to artists' rights." He acknowledged that his work found an audience "in large part because of the long support of my music by terrestrial radio" and added, "I by no means see them as the bad guy."

    But Corgan called the royalties issue is one of "fundamental fairness." He said, "Not everyone who hears a song on radio buys a ticket or a T-shirt. Some just listen." And the only reward for that airplay, therefore, goes to the station and its advertisers.

    He said, "Simply put, if a station plays a song, both the author and the performer should be paid. These particular performances must have value to the stations or they wouldn’t be playing them."

    After testimony by the AFL-CIO's Paul Almeida, who brought letters in support of royalties from a number of unions, Patrick Communications Managing Partner Larry Patrick -- also the owner of 14 small-market stations -- took his turn.

    'Significant And Devastating Effect'

    Patrick focused on the financial plight of radio, saying, "I have been a part of the radio industry for 40 years, and I can tell you that over the course of my career, I have never seen what the radio industry is currently experiencing. The economic downturn is having a significant and devastating effect on local radio."

    And as bad as things are, he said, "it will deteriorate even further and more dramatically if HR 848 were to be enacted." Patrick pointed to owners unable to sell their stations because buyers can't get financing and the widespread financial difficulties at larger companies, naming Salem, Saga, Radio One, Citadel, and others that have cut salaries and laid off staff. If a royalty is put in place, he said, "Station owners will further reduce staffing and services, which will only hurt their local listeners while enriching the big music labels."

    The proposed flat fee of $5,000 for "small stations," Patrick said, could force stations to cut local services and reduce staff, and could threaten stations' ability to provide emergency services.

    Patrick said, "The recording industry is living in a fantasy world that is divorced from the critical depressed financial position in which almost every radio station finds itself today."

    'Supporting The Music Industry For Decades'

    Newberry, like Patrick, cited the "sharp economic downturn," and said the bill "attempts to create a conflict between artists and radio where no conflict exists. In reality, local radio has been supporting the music industry for decades."

    Newberry continued, "Which is why it boggles my mind that a bill that is supposed to be about benefiting artists, takes 50 percent of the performance fee and puts it into the pockets of the big four record labels, most of which are not even American companies. The record labels actually walk away with more money under this bill than do the featured artists." He said that if artists find themselves in difficult financial straits, it is because of the "one-sided, unfair contracts" they sign with the labels.

    Along with radio, Newberry said the bill would hurt composers, because less music would be played; new artists, because every song would have to be considered for its potential return on investment; and minority ownership. He said, "What help will a minority tax certificate be if you can afford to buy the radio station, but can't afford to run it?

    Newberry said the bill has "significant unintended consequences that I don't believe this committee has fully investigated."

    'It's Not Complicated'

    RIAA CEO Mitch Bainwol, also testifying for MusicFIRST, began by saying, "This issue unites the creative community, property rights advocates, and labor." He also said it "isn't complicated, as the broadcasters suggest."

    Bainwol called radio airplay of the labels' music a "taking" and said, "More than half of what big radio plays are oldies," and the promotional value of that airplay is "hollow." He said, "We're not saying there's no promotional value [to airplay]. There is. But it's diminished."

    Bainwol said a royalty would not be merely moving revenue from one company to another, but half would go to artists, and reciprocity with other countries would bring in millions more.

    When Conyers asked for further statements, Newberry objected to the word "taking," saying, "These are not robber barons that show up in the middle of the night and take the music." He also noted, "Radio does not equal music. Music is part of the radio industry, but we have talk stations, we have sports stations, we have many many stations that contribute to that $16 billion industry."

    Berman then said, "I hear that you actually pay the sports teams for the right to broadcast sports radio, and I hear you pay the talk radio hosts for the talk radio show" -- but cut Newberry off when he tried to respond, saying, "That was rhetorical."

    Berman also supported the idea of a study of the issue, perhaps by the Government Accountability Office -- but he wants a bill that establishes a performance right to be put in place first.

    Performance Tax Hot 100

    As radio and labels squared off Tuesday morning Performance Rights Act, the NAB ran an ad in Capitol Hill publications with the "Performance Tax Hot 100" -- an empty chart. The ad, in Politico and Congress Daily, reads:

    "Radio is where listeners discover new music and new artists. It's where the artists you love got their big breaks. But the record labels are pushing a bill that would levy a fee, or 'performance tax,' on the music local radio plays. That means radio stations will inevitably play less music and stop taking chances on unknown artists. The performance tax; bad for radio, bad for music."

  6. ShiningStar

    ShiningStar Well-Known Member

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    So what you are saying is the wording is incorrect. That it could be for low stations to save but since majority is owned by minorities they would benefit most from it because they represent the face of low revenue dials? Maybe i am reading way to much.
  7. WoodysGirl

    WoodysGirl Everything is everything... Staff Member

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    I honestly didn't read the OP, just the thread title. Nor do I agree with the proposed legislation that should benefit minorities only.

    I just know that two of the radio stations that I listen to alot have been pushing their listeners to contact their congressman regarding the issue.

    I'll re-read the original article, but based on some of the interested parties, ie Maxine Waters. I think I'm more right than wrong that the bill mentioned in the original is a reactionary thing.
  8. burmafrd

    burmafrd Well-Known Member

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    Maxine Waters being involved should automatically cause suspicion.
  9. trickblue

    trickblue Old Testament...

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    I'll Amen that... she is barely lucid...
  10. sacase

    sacase Well-Known Member

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    As far as I know the record companies give the readio statations the music they want them to play (free advertising for the lable and the artist).

    The radio stations play the music and mix in commercials based on the listening audientce (income for radio stations).

    Here is the thing, if artists really want to be this greedy then they should either pay the radio stations to play their songs or make their music and shut the hell up and be happy with being underground or local artists and be broke.

    The only thing this is going to do is kill radio.
  11. burmafrd

    burmafrd Well-Known Member

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    Its all about MINORITY and nothing else (read black and hispanic). Just another side of the fairness doctrine BS where the libs want to force the rest of us to listen to them and we tune them out.

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